Threshold Harvard Case Study

Threshold case study

Threshold Sport's goals were to grow their company's footprint and revenue generated in marketing and producing US based cycling competitions. Their strategies included locking in regional races for 3 year terms with strong sponsorship partners. They have also purchased equipment at a reduced rate and hope to rent this equipment to help increase cash flow. Threshold is a start-up company and most of the value from this company currently resides in the professional experience and networks in the principles involved.

Threshold must choose between Debt, or equity financing. The equity portion of the financing could come in the form of a preferred or common stock offering.

The Debt financing seems the most unlikely of the three options presented. Threshold lacks the assets necessa to leverage the amount of money they are seeking, so both Casale and Chauner would have to get personally involved. Threshold would also lose flexibility and at this time in their growth trajectory, flexibility is very important.

Common Stock is another, yet still relatively unattractive solution. The company needs to hold onto control of the company and not be beholden to the shareholders who may not understand their vision at this point. A positive of the stock offering is maybe a small offering in order to gain name brand recognition within the cycling commuity. The case mentions dividends, yet at his time